2012-07-02 Police Fund Special Meetingr�
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• CITY OF OKEECHOBEE/OKEECHOBEE UTILITY
AUTHORITY/POLICE/FIRE PENSION BOARDS
SPECIAL MEETING MINUTES, July 2, 2012
CITY HALL, 55 SE THIRD AVENUE
OKEECHOBEE, FL 34974
CALL TO ORDER SPECIAL MEETING: 2:15 p.m. by Jamie Muliis
TRUSTEE ATTENDANCE:
CITY OF OKEECHOBEE/OUA
Jamie Mullis, Chairperson Melisa Jahner, Secretary
Daryl Roehm Kevin Barbour
Linda Tewksbury
POLICE: Bettye Taylor, Secretary Bill Bartlett
FIRE: Billy Douglas, Secretary Glen Hodges
Mike Skipper
OTHERS PRESENT: Basil Coule, Financial Liaison
Brian Whitehall, City Administrator
CONFERENCE CALL: Scott Christiansen was present via conference call. He explained that there were no liabilities
should the boards decide to make the change and that there were pros and cons on both sides. The general rule is to
• have separate managers, but it would be up to the boards to decide which way they preferred.
The boards were discussing the recommendation from Jack Evatt, Representative of The Bogdahn Group, to
consider changing fixed income managers from Bowen Hanes to PIMCO since Bowen Hanes has not met
performance expectations.
His opinion is that Bowen Hanes is not a dedicated fixed income manager as they manage only one "fixed income
only" portfolio. A memorandum from Jack Evatt was distributed with the following reasons to consider:l) Two
managers instead of one reduces manager risk. 2) Good combination of upside capture/downside capture by
combining a more opportunistic manager (PIMCO) with a manager (Dodge & Cox) that has historically protected the
downside very well. He also identified what the necessary steps would be should the boards decide to take action.
A memorandum from David Kelly of Bowen Hanes was also distributed. They understand that the portfolio has not
performed as well as the market index or our peers since the inception of our relationship. They have been "bearish"
on bonds, which has been the wrong call over the previous couple of years, but feel the portfolio is positioned
appropriately looking out over the next few years for the following reasons:1) long term growth trend/pro-business
landscape improving 2) more sustained appetite for risk: Europe's problems will not last forever, and once the clouds
of uncertainty lift, rates will move dramatically higher 3) the Fed's actions are designed to increase inflation
expectations, they are weakening the currency which also destroys purchasing power, these ingredients will likely
produce inflation at some point & once started it is very difficult to stop quickly, rising inflation would tend to produce
higher interest rates and lower bond prices. The question being: Does the Board believe in gradually higher rates
over the next few years or does the Board believe these rates will stay low or trend lower for the next few years?
Their bottom line is they think the weight of evidence is heavily on the side of higher interest rates and that bond
performance of the past will be a distant memory. Their timing has obviously been early, but in the end, will have
worked out for the betterment of the Plans.
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After discussion, the Boards decided not to take action, but to request the updated new quarter portfolio before the
• August 6, 2012 meeting. Also, the Boards requested that Tim Nash, the assigned Consultant of The Bogdahn Group
be present at the next meeting.
ADJOURN MEETING: The meeting was adjourned at 3:00 p.m.
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�ettye Taylof---Secret�ry
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